Q

What are the territorial limitations in a commercial general liability (CGL) coverage form with respect to completed operations? The definition of “coverage territory” has it that coverage applies in “all parts of the world if the injury or damage arises out of goods or products….” Does this wording include completed operations?

It is probably very seldom that a problem could arise over this issue, but we have an example to consider. If a customer brings his plane to our insured in Delaware for engine repair and this customer crashes in Mexico because of faulty work on the engine, has the incident taken place in the coverage territory under the CGL form?

Delaware Subscriber

A

It may be that the drafters of the policy language did not include the words “completed operations” in the coverage territory definition because most operations, unlike products, are tied to a place. For example, if the site of the ongoing operations is in the United States, then usually, the United States will be the site of any completed operations exposure. Of course, as your example suggests, this is not always true of operations that involve alteration or repair of chattels.

Whenever an extra-territorial exposure like this one exists, the definition of coverage territory has to be amended to extend 4c 1(a) to add the word “handled” so that coverage applies to “goods or products made, sold, or handled by you in the (coverage) territory….”